Happy St. Patrick’s Day, friends!
Lottery tickets, gas station scratchers, the dinging of a slot machine in Vegas. We’ve all wished for a little bit of Luck of the Irish from time to time. But, if you’re waiting for a pot of gold at the end of your escrow (see what I did there?), a word of caution on this St. Patty’s Day.
With the market on proverbial fire, we are encountering the “aspirational seller” more and more out there. The seller who throws a categorically unrealistic number into the universe to see if there’s a buyer with more money than sense willing to grossly overpay for their property. Now, don’t get me wrong. We are all for pushing the boundaries, breaking records and setting new highs in a neighborhood. However, there is a tipping point where results – as in green in your bank account – suffer.
Here are our 5 reasons overpricing makes buyers green in this hot and heavy seller’s market-
- Scaring off potential buyers. The only people more obsessed with your Zestimate than you are buyers who are thinking about purchasing your home or similar nearby homes. While that magic number isn’t a hard fast rule for pricing, buyers have access to the comparable sales data and they can sniff out an overpriced listing faster than you can say leprechaun.
- Days on market. While your home is being overlooked by buyers because your price is in left field, the days on market are ticking by. Serious buyers are obsessed with days on market in this competitive offer environment and there is a direct correlation between the initial offer price a buyer makes and your days on market. 1 day on market, buyers are clamoring to be the best offer and WIN. 31 days on market, buyer will smell blood in the water and the low balls will start rolling in.
- Price reduction. If you think days on market is ugly, wait until you reduce your price. You priced your home at $650,000 knowing full well it is worth $600,000 on it’s best day. Now, it’s time to adjust. Buyers see this as a Hail Mary and wonder just how low they can go. Avoid price reductions and price at fair market value out of the gate to maximize the end game – your profits.
- Missing in search results. Every serious buyer is cruising around town on their smart phone receiving dings and pings every time a property hits the market that could fit their criteria. If you’re priced at $650,000 but you want $600,000, you’ve priced yourself out of ever buyer search that is capped at $600,000.
- Appraisal. Let’s just say you find your four leaf clover…that buyer who tells you everything you want to hear. Lest we forget there are still financing hurdles to overcome. Any financed buyer will require an appraisal. If (and when) that appraisal falls short, we’re back to square one. Does your buyer have an extra $50,000 lying around? Maybe, maybe not. Are the willing to spend that nest egg overpaying for a home? Maybe, maybe not. Don’t leave it to luck. Lean on local experts for pricing expertise, strategy and tactics to maximize your home equity.